Santa Rosa electric car distributor Zap announced a deal Monday that could provide it with up to $25 million in fresh financing to grow the business.
Zap hopes to expand its dealer network from 56 to 200, CEO Steve Schneider said. Auto dealers are looking for new brands as conventional car makers cut their offerings, he said.
?The timing is very good for us,? Schneider said. ?It?s a great opportunity to fill the niche.?
Under the financing deal, Redwood City-based Cathaya Capital L.P. purchased 20 million shares of Zap stock from the company for $5 million and agreed to loan the company up to $10 million.
Cathaya also received warrants to purchase up to 16 million Zap shares in the future at 50 cents per share.
Overall, the deal could provide up to $25 million in new financing for Zap, the company said in a statement.
Zap, founded in 1994, sells an assortment of Chinese-made electric cars, trucks and scooters. The public company lost $2 million on sales of $1 million in the first quarter ending March 31, according to filings with federal securities regulators.
Zap stock closed at 44 cents a share Monday, up 4 cents in over-the-counter trading.